MEETING WITH MONTENEGRO DEPUTY PRIME MINISTER DJUROVIC TO

UNCLAS GENEVA 001055 STATE FOR EUR/SCE, EUR/ACE, EB/TPP/MTA STATE PASS FOR USAID USTR FOR MORROW, KLEIN USDOC FOR 4232/ITA/MAC/EUR USDOC FOR CLDP/SKERR E.O. 12958: N/A TAGS: ETRD ECON EINV WTRO USTR MW SUBJECT: MEETING WITH MONTENEGRO DEPUTY PRIME MINISTER DJUROVIC TO DISCUSS FINAL STEPS REQUIRED FOR WTO ACCESSION Summary Bilateral Meeting with Montenegro, November 24, 2008. ¶1. Summary: USTR Senior Director for WTO Accessions, Cecilia Klein, and USTR/Geneva representatives Bob Kasper and Nancy Omelko met Montenegro Deputy Prime Minister Gordana Djurovic and Montenegrin delegation on 24 November 2008. The bilateral talks focused on resolving remaining issues in the WTO accession negotiations, notably in the areas of intellectual property rights, customs, technical barriers to trade, SPS and state-owned enterprises. The discussions were constructive and largely successful. Both sides have homework assignments, but the agreed objective is to provide all necessary inputs to the WTO Secretariat in time to allow for the circulation of a revised draft Working Party report in mid-December. End summary. ¶2. Montenegro is in the final stage of its accession process. We believe that all bilateral market access agreements have been concluded, and that the WTO Secretariat is currently attempting to consolidate them. The bilateral market access agreement with Montenegro was concluded "in principle" in October, and Montenegro is producing the bilateral offers that will be signed and submitted to the WTO Secretariat to complete the consolidation. We also expect that Montenegro's offer on agricultural supports and subsidies will be acceptable to Working Party members. The legislative implementation of WTO rules is mostly complete. The remaining outstanding implementation issues include the WTO compatibility of the existing laws on Trademarks and Copyrights, which date from the State Union with Serbia. While Montenegro plans to enact all remaining legislative drafts soon, these two IPR laws will only be revised during 2009. U.S. IPR experts are reviewing the existing laws to ensure that they adequately implement the TRIPS Agreement until Montenegro's own legislation is enacted. Most of the remaining questions and unresolved issues are in the revised draft WP report and involve either clarifications on key issues (Trading Rights, State-owned Enterprises and Insurance Services); the need for additional information (on customs valuation, TBT, and SPS); or the need to verify outstanding legislation in the area of customs valuation, trading rights, and intellectual property rights (IPR) protection to ensure WTO conformity. ¶3. Working through the issues identified in the U.S. comments, Montenegro agreed to the following improvements in the WP report: (A) Additional descriptive material on State-owned or -controlled enterprises identified during WP deliberations; and clarification that all State enterprises are subject to the obligations of GATT Article XVII on use of "commercial considerations," without prejudice as to whether these will be notified to the WTO as enterprises with special or exclusive privileges; (B) Clarification that a registered foreign firm may import and export whether or not it is established in Montenegro; (C) Confirmation that fees for import licenses vary from Ministry to Ministry and are consistent with GATT Article VIII; (D) Confirmation of the extent and WTO compatibility of Montenegro's new customs fees; (E) Confirmation in the WP report text that Montenegro is joining both the Information Technology Agreement and the Agreement on Trade in Civil Aircraft; (F) Changes in excise tax rates to ensure that the rates on all types of still fruit wines are the same for all fruit; (G) Acceptance of revised commitment paragraphs on Quantitative Restrictions and Licensing, Customs Valuation, Trade Remedies, export restrictions, TBT, and SPS; (H) Confirmation that all export duties and the licensing requirements on ferrous and nonferrous scrap had been eliminated; (I) Confirmation that two identified subsidy programs had been eliminated or would be by the date of accession; (J) Confirmation that export promotion language would be removed from the criteria for establishment in the Free Zones, and that no rule of origin would exempt sales from the zone into the rest of Montenegro from reapplication of tariffs and taxes exempted on inputs of goods produced in the Zones; (K) Clarification that Montenegro's duty drawback scheme does not permit rebates of tariff duties in excess of the original charges on the imported goods; (L) Confirmation on various TBT issues and new text on the enquiry points; (M) Additional descriptive material on the acceptance of Codex Alimentarious and IPPC. (N) Edits to the text in the SPS and Services sections; and, (O) Confirmation that the Amended Law on Geographical Indications has fixed identified deficiencies. ¶4. Next Steps: The improvements listed above will be communicated directly to the WTO Secretariat, which will incorporate them into a revised draft report on the Working Party. Montenegro will provide bilaterally to the United States (1) additional information on its Customs Valuation legislation related to its WTO consistency and (2) remaining pieces of legislation for WTO implementation (Customs Laws and regulations, Law on Trade, and the remaining IPR legislation), so that remaining issues can be resolved. The United States will review and verify (a) the remaining legislative texts and (b) the consolidated draft Schedules when they have been produced, as well as (c) confirm the acceptability of Montenegro's improvements and additional information. We expect to be able to verify and sign the bilateral market access deal in both goods and services with Montenegro by mid-December, to allow circulation of schedules for verification before winter break. U.S. review and acceptance of the revised draft Working Party text and draft Protocol of accession will be crucial to meeting the timetable Montenegro has set to complete the accession process. ¶5. WTO Plans: It is likely that the new draft WP report will be circulated to WTO members prior to the December-January holiday break, along with the consolidated schedules. The Secretariat will ask for final comments and verification of the schedules and schedule an informal review meeting for mid January to address any outstanding issues in the draft report or schedules. If all goes well, the plan is for the accession package to be adopted formally at a Working Party meeting in late January, in time for the package to be transmitted to the February 5 General Council for final WTO approval and Montenegro's signature. After ratification, Montenegro will become a WTO Member 30 days after the instrument of ratification is transmitted to the WTO Director General. Deputy Prime Minister Djurovic believes Montenegro will be a WTO member in late April or early May. Allgeier